Chandigarh, Feb 24 (IANS): The Punjab Water Resources Department on Wednesday signed an agreement for the construction of powerhouses of the Shahpurkandi dam project.

It was signed in the presence of Water Resources Minister Sukhbinder Singh Sarkaria and Principal Secretary Water Resources Sarvjit Singh, by OMIL JV Executive Director, Bharat Kothari, and Chief Engineer (Dams) S.K. Saluja.

The construction of powerhouses of 206 MW would be commissioned at a cost of Rs 621 crore in 36 months. The electromechanical work is being executed by BHEL. On completion, the project will generate 1,042 MU power annually of Rs 415 crore.

The project would help improve the irrigation system and clean power generation in the state, said Sarkaria. Almost 60 per cent work of the dam has been executed.

Principal Secretary Sarvjit Singh said the Union Ministry of Environment, Forest and Climate Change and the National Wildlife Board have accorded approval for the area falling in Jammu & Kashmir.

The project would benefit 37,000 hectares in both states.

The Shahpurkandi project will also allow the Ranjit Sagar Dam to run as peaking station giving additional benefit of more than Rs 100 crore annually, besides increasing tourism potential in the border districts of Punjab and in Jammu & Kashmir, said Chief Engineer Saluja.